Posted on 22 Dec 2022
Australia-listed European Lithium (EUR) announced Wednesday that BMW will be the first offtaker from its Wolfsberg lithium hydroxide project in Austria, Kallanish reports.
The six-year binding offtake agreement, signed via its wholly-owned Austrian subsidiary ECM Lithium, covers 50,000 tonnes of lithium hydroxide. Supply should start in 2026 at 5,000 t volume in the first year. Deliveries will then increase to around 9,000 t until 2031, at which time the parties can extend the offtake for another three years.
BMW will make an advance payment of $15 million to be repaid through equal set-offs against lithium hydroxide delivery to the carmaker. Pricing will be based on reference spot prices with a discount applied.
EUR says securing its first offtake is a key milestone that allows it to focus on the final steps of delivering Wolfsberg, while it looks to the future and builds a portfolio of prospective battery metals projects located in Europe.
As per the companies’ initial announcement in August, BMW has the first right to purchase 100% of the lithium hydroxide produced from the identified resources at Wolfsberg. Based on a 2018 pre-feasibility study, the project could run an annual production of 10,129 t of lithium hydroxide with a mine life of over 10 years. Mineral resources are estimated at 10.98 million t at 1% lithium oxide.
EUR is expected to publish its definitive feasibility study before year-end. First hydroxide production was originally planned for Q1 2025.
Source:Kallanish
